Local communities should “control a quarter of post-Brexit prosperity fund”, says report

Locality says co-ops and community businesses are more effective in creating employment and targeting local needs

A new report from Locality looks at how community businesses can help tackle the unemployment crisis sparked by Covid-19.

Locality – which supports a network of more than 600 community organisations – says its Communities Work report shows that places with the worst existing employment deprivation are more than twice as likely to be at high risk of job losses stemming from the Covid crisis.

“These neighbourhoods are facing the ‘double distress’ of a new wave of unemployment on top of existing job shortages,” it warns.

The report – produced with co-op apex body Co-operatives UK and rural community business charity Plunkett Foundation – says these areas also have a conentration of community organisations.

This makes them well placed to support people by:

  • Providing local jobs and volunteering opportunities in places facing the highest levels of deprivation
  • Providing tailored and sensitive employment support for their community
  • Taking a strategic role in supporting local economic development

Locality said: “To tackle this jobs crisis and level up the country at the same time, the government must put communities in charge of future local economic regeneration.”

The report is was drawn up to support the Communities in Charge campaign – a coalition of local people, community groups, businesses and national organisations calling for communities to be put directly in charge of the government’s post-Brexit fund for economic regeneration, the Shared Prosperity Fund (SPF) – due to be announced this autumn.

The report calls for at least a quarter of the SPF “to go directly to local people to invest in their own priorities for the economy”. It argues that community businesses and co-ops offer solutions in deprived areas because they fill gaps where the private sector sees no reason to invest “meaning they offer a precious route to the jobs market where few exist.”

Co-ops employ more than 233,000 people across the UK, it says, with a particular concentration across the north and midlands; and it offers data to show that “worker co-ops are, on average, better at creating jobs
compared to businesses generally” – and also have lower pay ratios and share profits equitably.

Meanwhile, community businesses “employ nearly 34,000 people across the country and provide development opportunities for those who would otherwise not actively participate in the local labour market”.

The employment support these sectors offer is sensitive and tailored to local community needs, adds the report. It says the community business and co-op sectors use local knowledge and help tackle inequality within regions.

But it warns that Local Economic Partnerships (LEPS) operate at too great a scale to engage with community organisations and can lead to replication and increased bureaucracy. “Their accountability is weak and their experience is too narrow,” it adds, “with mostly very poor understanding of the social economy.”

LEPs should be change from business-led bodies to “true partnerships, which bring together all participants in the local economy for the benefit of a place”.

The report wants at least a quarter of the SPF to go to the community sector – with 23% “ringfenced for community-led partnerships, supported by
local authorities … and a further proportion (2%) should be set aside as ‘risky capital’ for small-scale grassroots initiatives which need investment to see if they are successful in transforming their community”.

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